Question

What changes the value of the dollar?

Answer 1

There are a number of factors that changes the value of the dollar; whether in favor or not.

• The country's monetary policies
• Demand for dollar
• International trade
• Economic growth
• Inflation

What causes a change in dollars value?

The value of dollars appreciate or depreciate when;

The demand for dollar is high or low. For example, the global community usually want their investment secured with a stable currency. Some of them prefer their investments in dollars. This means that the demand for dollars increases and also it value appreciates. If people don't demand for dollars, and the country has little investors, the dollar depreciates.

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Answer 2

The things that lead to changes in the value of the dollar include:

• Inflation
• Monetary policy
• Demand and supply of the dollar

What causes the value of the dollar to change?

Inflation can lead to a change in the value of the dollar because higher prices basically mean that currency is falling in value. Monetary policy can also lead to a change in the dollar because the quantity of money in the economy can influence the value of it.

Then there is also demand and supply. If more people demand dollar assets than the supply, the value of the dollar would go up and vice versa.

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